Goldman Sachs invested in their car leasing business. Sub prime loans to buy/lease cars is pretty profitable and doesn’t depend on the grander Uber business model working.
Wall Street loans Uber $1 billion to offer subprime auto leases
Lending at usurious rates to economic illiterates. Sounds just about exactly in Goldman’s wheelhouse.
Well yes, scum of the earth and all that. However, you must admit you were incorrect in saying this was Goldman just rollin’ the dice on Uber.
But it still doesn’t make any sense. Why would someone work for $4/hr? You’d be better off working at McDonalds for $8 or $9/hr.
Keep in mind that these people already own a car, so they aren’t the most destitute members of society that would work for sub-minimum wage.
Further, from talking to Uber drivers, a tremendous benefit is that they can work as much or as little as they want, as often as they want. They have two hours to kill between meetings? Pick up a couple of fares. That type of flexibility is non-existent in other jobs.
You answer your own question, a prestige value that is different from working at the fast food, and the apparent economic illiteracy of their own complete cost structure, seeing the income but not understanding a real net revenue.
Someone working full-time as a taxi driver has fixed overheads. Someone occasionally using Uber to make a few bucks in what would otherwise be downtime using a car they already have for other reasons doesn’t.
Except for passenger insurance, all that stuff both (1) isn’t a fixed cost and (2) is a cost that you already have to cover if you own a car.
Passenger insurance certainly could be offered on a per-mile basis, although I don’t know if anyone offers it that way.
A very interesting thread. I’ve lived in Saudi for six (not consecutive) years and, last summer, was told I’d be living in the DQ (Diplomatic Quarter) from September onwards. I knew the DQ as a huge, heavily-fortified compound and getting a taxi would be very difficult and frustrating, especially when temperatures approach 120 degrees. So, late last August I got the app and started using Uber.
What a change from the badly-maintained, badly-driven, overcharging (they rip you off if they can) taxis I’d used for the previous five years. There are a few taxi drivers who maintain their a/c and clean their cars, just as there are a few Uber drivers here who take unnecessary diversions and blame their satnav (correctly, usually, because of the enormous subway system being built, and you can’t tunnel in sand, but that’s for another thread, but as I travel the same route every day, it gets frustrating), and I only take a taxi here if I really have to.
The drivers are sometimes Saudi, sometimes not, but in general have well-maintained cars and will get you to your destination in comfort. I get the impression that they’re using their free time to earn some extra money, and I’ve even a few students who do this when not in class. As the drivers are given a rating (and vice versa) which seems to motivate them to drive better, the 150+ Uber journeys I’ve taken since last August have been 80% good, 10% very good and 10% I’ve complained on the app. This, in my experience, is much, much better than the very substandard service I’ve had with taxi drivers.
The issue with the population bulge in Saudi giving so many driving young men nothing to do is well-researched, so the Saudi government sponsoring Uber comes as not the most surprising news. This, along with a huge increase in fines for speeding and running red lights, and the costs of insuring a car coming more in line with the actual price, plus petrol being subsidised less is bringing about rapid change to behaviours on the roads here. Uber seems to be bringing some very positive changes in this market, and every country - in fact individual areas in each country - might be positive or not for Uber. Burning through cash so fast isn’t a good sign, I hope once Uber finds where it can work effectively it’ll focus its interests. Here I see a lot of single women getting into Ubers when hailing a taxi wouldn’t be approved of, some more freedom for them is a good thing I think we can all agree on. There also is the benefit of women traveling alone with male friends, who are their “Uber drivers” if they get stopped by the police. This I notice is going on more, although is still infrequent so far. The liberalisation of travel can’t come too soon here and in many cities.
FWIW, here you’'re charged for the time and distance, so if your driver takes you on the scenic route you pay more. Uber has a price in mind for the journey so if it’s much (30%ish) higher you can argue the amount and be charged the lowest possible price, with a groveling apology (in perfect English) and refund on the app. I’ve no idea if the driver is paid less or not. If he isn’t, this has to contribute to the losses of 25 million a day.
You’ll be surprised to learn no one offers it ‘per mile’.
You seem to suggest driving for Uber does not add wear and tear to all ares of a car, whether in terms of interior or mechanical. And that mileage doesn’t impact on resale price, and doesn’t require more maintenance. You sound like exactly the kind of financially savvy driver Uber relies on.
It might also be worth knowing you don’t just switch on and work. Uber is, not surprisingly, busiest at the most unsocial hours. If you want to work when you have a little time free, that’s likely because you socialise at the same patterns as others.
I’m not surprised, since it takes time for markets to adjust to things like this.
I’ll be very surprised if no one offers it in ten more years.
Please point out where I seem to suggest that. I’m already using the ~$3 an hour that’s been mentioned in this thread as the real net after actual expenses. And the post you responded to was responding to someone calling those things fixed overhead, which they are not. The fixed part of the cost (you’ve got a fixed cost for, say, registration, that you have to pay regardless of how much you drive) is something that you already pay if you own a car. And the amount of wear and tear, milage impact, and additional maintenance caused by using your car to drive for Uber are all per-mile costs.
:rolleyes:
Hey, thanks for the snarky insult, internet stranger. Maybe try working on your reading comprehension.
I’m not 100% sure how to parse this, but I think you’re saying that it’s not convenient for everyone to work occasionally for Uber because the time that people have free for an Uber gig isn’t a time that people want rides. I imagine that’s probably true.
But Uber doesn’t have to be a good side-job for everyone. It only has to be a convenient gig for some people to make it worthwhile. People are not a monolithic block that all have the same schedules and behaviors.
Pay per mile Uber insurance has been available since 2015.
My response to this statement is “so what”? You said it yourself. The convenience, safety and ubiquity of credit cards generates business and overall increased economic activity. In exchange for that convenience, we pay a slight fee that is spread more or less evenly throughout the economy. That seems like a fair trade to me.
That actually doesn’t sound anything like Goldman’s core business of investment banking and institutional trading. IOW, typically dealing with large corporations and other financial institutions who are far from “economic illiterates”. I know they are supposed to be a “Giant Vampire Squid” but, it’s still not 100% why, other than they seem to make a lot of money and it tends to go to a small portion of managing directors.
Yep, that’s the gist of it. If you’re an average kind of person living normal hours, when you don’t want a cab - and are free to work a few hours - nor do most people.
You were originally talking about how we can just hop in the car and work a little. The model will obv. always work for some.
Yeah :
Not entirely helpful in like 99% of markets.
And you can!
Whether or not that’s a good idea for a given individual is going to depend on a lot of things. But the same is true of lots of jobs.
Like, I would never want to be a doctor. Their hours are inhumane. But plenty of people do, and put up with the fact that they have to work like 36 hours in a row sometimes.
There’s an absolutely devastating profile of Mr. Uber in this week’s NYT. It paints him as exactly the kind of numbers-whiz, genius-asshole, “don’t need no rulez” VC-burner we saw too much of in the first two tech booms. The kind who make one small fortune after another by burning up most of someone else’s large fortune… and have the suckers lined up for miles. They’re hell on ideas, and almost completely incapable of getting the idea to a working point.
The pencil animations are worth a look, too.
There’s an interesting article in the NYT today about Travis Kalanick.
It sounds like he has the worst qualities of Steve Jobs, Bill Gates, Mark Zuckerberg, and Jeff Bezos… without any of their redeeming features.
Uber’s C.E.O. Plays With Fire
*Travis Kalanick’s drive to win in life has led to a pattern of risk-taking that has at times put his ride-hailing company on the brink of implosion.
*
Sorry… didn’t see the post above before I posted.
The interesting part of that NYT article in regards this conversation:
You seem intent on nitpicking for the smallest reasons. Your original point was that per mile insurance won’t be available for a long time. I pointed out it’s been available for 2 years now. When it launched, it started in limited markets and has obviously expanded over time. Also, California alone is more than 10% of the US population so your 99% estimate is at least an order of magnitude wrong.
So roughly 100% of their drivers turn over in a year then? That doesn’t sound like a very sustainable situation to be in to me.
No. That’s not what that means. The turnover is probably heavily weighted towards newer drivers.